Creditanstalt

The Creditanstalt (sometimes Credit-Anstalt,[1] abbreviated as CA), full original name '''k. k. priv. Österreichische Credit-Anstalt für Handel und Gewerbe''' (lit. 'Imperial and Royal privileged Austrian Credit Institution for Commerce and Industry'), was a major Austrian bank, founded in 1855 in Vienna.

From its founding until 1931, the Creditanstalt was led by members of the Rothschild family, who were among its significant shareholders. Its historically consequential failure in 1931 led to a merger engineered by the Austrian government in 1934, in which it combined with the Wiener Bankverein and the sound parts of the Niederösterreichische Escompte-Gesellschaft to form Österreichische Creditanstalt – Wiener Bankverein, later abbreviated to Creditanstalt-Bankverein. The latter came under the control of Deutsche Bank following the Anschluss in 1938, was nationalized in 1945, and was eventually acquired in 1997 by Bank Austria to form Bank Austria-Creditanstalt, since 2005 a subsidiary of UniCredit. UniCredit phased out the Creditanstalt brand in 2008.

Foundation and development until 1931

The Creditanstalt was founded in 1855 by Salomon Mayer von Rothschild

Downfall and merger

Burdened by the troubled legacy of its recent acquisitions, the Creditanstalt declared on 1931/05/11 that it was unable to publish its financial statements for 1930, immediately triggering panic. At that time, it represented 27 percent of the Austrian banking sector's total assets, a sum equivalent to 16 percent of the country's GDP, so that there was no option to have it absorbed by another larger banks as had been done with Unionbank in 1927 and Bodencreditanstalt in 1929. This was one of the first major bank collapses that initiated the Great Depression.[9][10][11] Chancellor Otto Ender organized a rescue that entailed cost-sharing by the Austrian government, the Oesterreichische Nationalbank, and the Rothschild family, rejecting nationalization plans advocated by the Social Democratic Party. The group's foreign assets were transferred to a Monaco-registered entity, the Société Continentale de Gestion, of which Creditanstalt held of the share capital while its foreign creditors were awarded the other half.[12] Creditanstalt's Yugoslav affiliate, the Ljubljana-based Credit Institute for Commerce and Industry, was acquired by the Ljubljana City Savings Bank, the Savings Bank of the Drava Banovina, and German-Slovenian businessman August Westen. The Creditanstalt's bankruptcy and its impact in producing a global banking crisis provided a major propaganda opportunity for Adolf Hitler and the Nazi Party in which they further blamed the Jews for German and international economic and social troubles.[5]

In late 1933, Chancellor Engelbert Dollfuß ordered the Creditanstalt's merger with the Wiener Bankverein and the sound parts of the Niederösterreichische Escompte-Gesellschaft, as a consequence of which the bank became majority-owned by the government, while foreigners still held about 42 percent of the share capital. The merged entity took the name Österreichische Creditanstalt – Wiener Bankverein. By early 1938, the bank had branches in Bregenz, Feldkirch, Graz, Innsbruck, Klagenfurt, Leoben, Linz, Salzburg, Sankt Pölten, Villach, and Wiener Neustadt; controlling interests in Bank für Oberösterreich und Salzburg, BKS Bank, Bank für Tirol und Vorarlberg, and Steiermärkische-Escompte-Bank; and minority stakes abroad in the former Wiener Bankverein affiliates in Poland and Yugoslavia as well as the Banque Franco-Belge et Balkanique in Bulgaria, plus a board representation in the Hungarian General Credit Bank.

Anschluss and World War II

Following the Austrian Anschluss to Nazi Germany in 1938, the bank was immediately targeted for both financial and racial reasons. By that time, around 36 percent of its capital was held directly by the Austrian government, 12 percent by the Oesterreichische Nationalbank, 16 percent by the bank employees' pension fund, and 7 percent by the bank itself through its subsidiary österreichische Realitäten AG. On 1938/03/26 it was coerced to enter a "friendship agreement" with Deutsche Bank, by which the latter secured a presence in its board of directors. Louis de Rothschild was immediately arrested and imprisoned for the losses suffered by the Austrian state when the bank had collapsed. Deprived of his position and property, he was released upon payment of $21,000,000, believed to have been the largest bail bond in history for any individual,[13] and migrated to the U.S. in 1939 after more than one year in custody.

Later in 1938, the bank was jointly taken over, without compensation, by German government holding VIAG (conglomerate), the Deutsche Bank,[14] and the Reichsbank, which held respectively 51 percent, 25 percent, and 12 percent of its capital. In 1939, its name was abbreviated to Creditanstalt-Bankverein; the fiction of independence was maintained for propaganda purposes, but in practice the bank was run as a fully integrated operation of Deutsche Bank.

Following the annexation of the Sudetenland, the bank opened branches in Lundenburg (Břeclav), Nikolsburg (Mikulov) and Znaim (Znojmo), then in 1939 took over the former operations of Böhmische Union Bank in the newly formed Slovak Republic. Its Lviv-based affiliate the Akcyjny Bank Hipoteczny was nationalized following the Soviet invasion of Poland in September 1939, and later liquidated. In April 1942, Deutsche Bank raised its ownership to 51 percent by acquiring a block of shares from VIAG.[15] During wartime, the Creditanstalt-Bankverein expanded its operations into Nazi-occupied Czechoslovakia, Poland, Yugoslavia, and in Nazi-allied Bulgaria. These included the formerly Bankverein-controlled Allgemeiner Jugoslawischer Bankverein (Belgrade and Zagreb) and Allgemeiner Bankverein in Polen (Warsaw), a minority interest in the Moravian Bank in Brno, and 30-percent stakes in the Böhmische Union Bank (Prague), Deutsch-Bulgarische Kreditbank (Sofia), and Banca Comercială Română (Bucharest).

Even though Josef Joham, its former head and still board member during the war, made contact with the U.S. Office of Strategic Services, the Creditanstalt in that period settled the financial issues of several Nazi concentration camps as well as the Aryanization of Jewish-owned businesses, like the re-establishment of Sascha-Film as Wien-Film Limited.

Buildings

Vienna

In 1855, the Creditanstalt was temporarily established at Renngasse 1 on Vienna's Freyung square.[20] In 1858, it purchased and demolished a number of houses on am Hof square in central Vienna and replaced them with a new building designed by architect Franz Fröhlich, with allegorical sculptures by Hans Gasser representing Navigation, Railways, Commerce, Industry, Agriculture, and Mining. The building, numbered am Hof 6, was completed in 1860 and was kept in use by Creditanstalt until the 1934 merger. It was subsequently purchased by the Österreichischen Realitäten AG, a subsidiary of the Oesterreichische Nationalbank, and in 1940 by the Steierische Baugesellschaft. Am Hof 6 was damaged by allied bombing on 1944/09/10 and subsequently demolished. A new building was erected in its place in the early 1950s for electricity utility Verbundgesellschaft, designed by architect Carl Appel.[21]

Between 1915 and 1921 the Creditanstalt had its head office expanded northwestward across Tiefer Graben street, on a land plot bordering the Freyung that it had purchased in 1914 from Niederösterreichische Escompte-Gesellschaft, which itself was moving from there to its new headquarters on am Hof 2. The opulent neoclassical extension, linked to the former seat by a bridge over Tiefer Graben, became the bank's main headquarters. It was designed by architects Ernst Gotthilf and Alexander Neumann; the same team had previously created the new head offices of Creditanstalt's competitors the Wiener Bankverein (on Schottentor) and the Niederösterreichische Escompte-Gesellschaft itself (am Hof 2), both nearby locations. Following the 1934 merger, the building was purchased in 1937 by Österreichische Versicherungs-AG, an insurance company. By 1980 it was the property of the Länderbank which used it for its Länderbank Art Forum, successively renamed Bank Austria Art Forum (1991–2002), BA-CA Kunstforum (2002–2008), and since 2008 again Bank Austria Art Forum Vienna. In 2010, it was acquired by financier René Benko, who repurposed its northwestern wing which became the seat of the Austrian Constitutional Court in 2012, whereas the art forum has remained on the southeastern side.[22]

In 1934, the Creditanstalt-Bankverein established its head office in the former seat of Wiener Bankverein at Schottentor. It remained there through the multiple mergers and restructurings until the late 2000s.

Other locations

In 1894–1896, the Creditanstalt erected a new building for its branch in Prague, designed by architect Emil von Förster with sculptures by Antonín Popp. In 1907-1909 the Creditanstalt erected a monumental branch building in Trieste, on what later became Piazza della Repubblica.[23]

industry	Financial services
fate	Merged with Bank Austria in 2002
successor	Bank Austria-Creditanstalt
founded	1855
founder	Anselm von Rothschild
location	Vienna, Austria

Foundation and development until 1931

Downfall and merger

Anschluss and World War II

Postwar development

Merger with Bank Austria and aftermath

Leadership

Buildings

Vienna

Other locations

See also

Further reading

External links

References